ESAB Corp (ESAB) Stock Forecast & Price Target

ESAB is positioned for attractive fundamental upside because the Eddyfi and EWM acquisitions shift the business toward higher-margin, more recurring revenue streams while expanding its reach into inspection, monitoring, gas control, and heavy fabrication. Eddyfi alone contributes roughly $270M of 2026 revenue with about 65% adjusted gross margin, 30% adjusted EBITDA margin, and 55% recurring revenue, and management has identified an approximately $450M commercial funnel plus roughly $20M of synergies that could drive cross-selling. The market appears to underappreciate the resulting mix improvement and deleveraging path, with pro forma higher-growth categories nearing 50% of sales, adjusted EBITDA expected around $713M in FY27E, and leverage projected to fall to 2.3x by FY27E.

ESAB is facing a fundamentally weaker setup because the 2Q26 revenue beat was overshadowed by a core adjusted EPS miss, a lowered FY26 core EPS guide of $5.40-$5.50 versus $5.69 consensus, and a 90 bps EBITDA margin decline to 19.5% as logistics, commodity, and growth-investment costs pressured profitability. The Eddyfi acquisition has also introduced higher interest expense, dilution from mandatorily convertible preferred stock and about 1.25M new common shares, and a heavier leverage burden of roughly $2.32B net debt, or about 3.7x FY26 adjusted EBITDA, before synergies and accretion are visible. On top of that, the company’s 7%-8% Middle East exposure, Russia reporting, and risk of slower deleveraging suggest the market is right to assign a persistent valuation discount until operating consistency improves.